H Wonthaggi Remineralizing Plant Draft - Assignment Example

hе Wоnthаggi Dеsаlinаtiоn Рlаnt Project Your name: Institution name: Project Overview On 19 June 2007 the Victorian government announced a plan to construct a salt water desalination plant (Wonthaggi desalination plant) as part of the next stage of its water sustainability in the city (Davidson, 2013). This announcement by the federal government was followed by a completion of a seawater desalination plant feasibility study that was conducted by the Melbourne Water (Davidson, 2013). The Victorian government was committed itself to a single Public Private Partnership (PPP) for the whole desalination project and a tender was issued in June 2008 (Ker, 2009). On 30 July 2009 the desalination project was awarded to the Aquasure Pty Ltd to finance, build, maintain and operate the project for the next thirty years (Randolph and Troy, 2008). The price for construction of the whole desalination project was fixed at 3.5 billion Australian dollars (Randolph and Troy, 2008). The desalination project was completed in December 2012 (Ker, 2009), but this was one of the largest Public Private Partnership projects to be undertaken worldwide in recent years and the project was significant milestone for Public Private Partnership given the difficult economic conditions at the time of its conception and the complexity and scale of the desalination project (Davidson, 2013). The desalination plant encountered an opposition from the local residents, community group, and the Australian Greens (Ker, 2009). Regular rallies were conducted in Victoria and Melbourne after the desalination plant proposal. More recently, a new opposition group Watershed Victoria has continued to oppose the whole project (Victorian Government, 2009). This report will analyze Wonthaggi desalination plant from 19 June 2007 to date in the context of best practices project management. Lastly, conclusion and recommendation will be made based on the analysis in this report. Project Analysis Most recently, there have been much public comments and media coverage on the problems facing distressed Australian Public Private Partnership projects, including the delays to the Wonthaggi desalination plant (Ross, 2008). The spotlight on Wonthaggi desalination project has also brought into question the efficacy and efficiency of the PPP procurement process itself. Further, tender process in Wonthaggi desalination plant was more complex and fell behind the target procurement timeline. The Victorian government has been stuck “with a very expensive white elephant” because if the Victorian government breaks the contract with Aquasure pty Ltd, it will cost the government billions of dollars in legal fees and the sovereign risk for the Victorian government would be too high (Victorian Government, 2009). It will be too costly for the Victorian government if the contract is breached because no company in future will seek to enter into a contract with the federal government without factoring in enormous premiums they will have to incur (Ross, 2008). The only way Victorian government could save money is not to purchase any water from the desalination plant because there is not feasible material savings available under this contract (Randolph and Troy, 2008). In particular, the Victorian government should look at the successful strategies used in other countries, especially in Canada, to reduce bid costs, tender timelines and complexities in the tendering process, as well as improving communication with bidders (King, 2008). The benefits of addressing the current problems facing Wonthaggi desalination plant could lead to fewer delays, lower cost and greater public sector engagement. All the desalinated water meets the strict standards of World Health Organization guidelines, Victorian Safe Drinking Water Act, and Australian Drinking Water Guidelines. The people involved in the project have been able to work closely with the operators that ensure the desalination plant ensure it produces water that meet the high standards of Melburnians currently they enjoy (Victorian Government, 2009). The quality of water is tested at all delivery points and the plant before the desalinated water enters the system. The desalination water will complement the high quality of catmint supplies in Melbourne. The desalination water quality standard has been developed by the water authorities and is used to complement the high quality of water that Melbourne people receive (Ross, 2008). The Australia department of health has also been consulted with regard to the water quality requirements (Randolph and Troy, 2008). As well as the specifications to ensure desalinated water meets the consumer’s needs.The quality parameters of the desalination water were put into the contract between the federal government and AquaSure pty Ltd. Cost management is a process which companies plan and control their cost of doing business. Single projects should have customized plan for cost management process, and the company should be able to integrate their cost management into their business model. When cost management is properly implemented into a project, it will translate into reduced cost of production, as well as increased value being delivered to the end consumer. For example, before the commencement of a project, the company should be able to identify and measure the anticipated costs. The total maximum to the state over the 30 years contract term of the desalination project is 5.7 billion dollars. This includes financing, construction and operating costs as well as the use of maximum water order of 150 billion liters of desalinated water annual for the next twenty seven years. The cost would reduce if less water is ordered by the federal government (Rayan, Djebedjian and Khaled, 2001). A Public Sector Comparator has showed the Public Private Partnership saved Victoria one billion dollar (net present cost 2009). If the Victorian government is able to deliver the desalination project, it has been estimated to cost 6.7 billion dollars in net present cost terms (Rayan, Djebedjian and Khaled, 2001), as compared with the 5.7 billion dollars net present cost for AquaSure Pty Ltd to deliver the desalination project. On a megaliter per day output capacity, the capital cost of the Victorian desalination plant can be compared to that of the Sydney desalination plant, and less than that of the Adelaide and Brisbane plants (King, 2008). The Victorian desal plant also have greater investment in landscaping and architecture than any other desalination plant in Australia. Risk management involves analysis, assessment, control and minimization, avoidance or elimination of unacceptable risks. A company will use risk avoidance, risk assumption, risk transfer, risk retention, or any other strategy in proper management of future events. A detailed risk assessment and environmental risk has been conducted as part of the EES for the sea water desalination project. The risk assessment provided a staged, risk based approach that was used to evaluate the potential impacts that the desalination project could have on the social, environmental and economic assets and beneficial uses. Levels of consequence for different beneficial uses and asset were defined, from extreme to negligible, in term of space, magnitude and time (Ross, 2008). A level of consequences have been determined for each risk and taking into consideration all the measures that have been put into place to reduce or avoid the risk and having regard to ‘reasonable worst-case scenarios’. Likelihood rankings in the desalination project were well defined, from certain to rare, to describe the likelihood of the events or consequence occurring (King, 2008). The defined level of likelihood and consequences were used to form the risk matrix and assign a level of risk that range from critical to low, to each identified environmental impact on the project. Integrated management is a modern approach to managing natural resources. It is a collaborative way of making decisions on how natural resources can best be protected and developed (Rayan, Djebedjian and Khaled, 2001). The overall objective of integrated management is for decision makers responsible for activities to manage these activities in a way that will sustain a healthy environment and provide due consideration of other users. The Cardinia Reservoir Desalination Integration Project has formed an integral part of the plan to secure water supplies in Victoria. New infrastructures have been built to prepare water supply network to receive water from the desalination plant (Randolph and Troy, 2008). Thereafter, desalinated water can be transferred to businesses and homes across Melbourne and its surrounding, giving the management of the project flexibility on how they manage their water supplies (Rayan, Djebedjian and Khaled, 2001). Scope management includes the process that is required to ensure the project includes all the work required to complete the project is successful (Victorian Government, 2009). In other words, it is concerned with controlling what is in the project and what is not in the project scope. The scope of the Victorian desalination plant project was to provide the state and its environs with a non-rainfall dependent supply; to allow for the future expansion of the desalination project to supply up-to 200GL per year (King, 2008); partnerships with Victorian Desalination Project 3 to ensure the desalinated water delivered meets the quality standard; to retain flexibility to vary supplies over time to support optimization of Victoria’s water supply network; and lastly, the project was to be delivered in a manner that is consistent with the federal government policy of management and ownership of water resources in public hands (Rayan, Djebedjian and Khaled, 2001). Time is a valuable resource not to be wasted. This is the most important resource in nay project. Every delivery in a project that is supposed to be made is time-bound. Therefore without proper time management, the whole project can head towards a disaster. When it comes to project time management, it is not just the time of the project manager, but also it is the time management of the whole project team (Victorian Government, 2009). In this approach, the activities involved in a project are estimated and the durations are determined, and it will be based on the resource utilization for each activity involved in the project. In addition, in order to estimate the resource allocation on the whole project, cost will play an important role in time management. This is due to the fact that schedule over runs are quite expensive for both parties in the project. On 30 July 2009, the desalination contract was awarded to AquaSure Pty Ltd to finance, build, maintain and operate the project for 30 years. Construction of desalination plant commenced on 30 September 2009 and was completed in December 2012. The desalination plant was one of the largest and complex projects undertaken in Victoria under changed industrial relations climate and adverse weather conditions in just over 36 months was no mean feat. Given the complexity and scale of the desalination project and the extreme conditions, this was a good outcome. This project was well executed exercise in both logistical and time management and included: Coordination of multiple construction crews working in various locations on the pipeline between Berwick and Wontaggi. Storage and transportation of vast quantities of small and large scale material required for construction that included 15,000 valves, 500 pumps, 72 pressurized filters, 51 reverse osmosis racks, and 200,000 tonnes of concrete. During environmental forums, various stakeholders that are involved in the project often have competing motivations, values and purposes. As demonstrated in Victorian Desalination Plant. This project was a controversial one involving the Department of Sustainability and Environment, local communities residing in the area, local council, and opposing groups such as watershed. Harding, et al (2009) refers to a stakeholder as someone or organization that has stake or interest in something. The relevant stakeholders in a project hold a stake or/and interest for many different reasons. The core and importance values of stakeholder engagement in the decision making process is well outlined by IAPP (Ross, 2008). Input from the regional authorities, councils, local community, and other stakeholders played (Randolph and Troy, 2008), and have continued to play, an important role in the Victoria desalination project. Public comments have been invited on the EES scoping document, and on the exhibition of the full EES. EES document has so far attracted over 100 written responses with a range of varying concerns and interests. The project management held a 15 day public hearing across October and November 2008, where an independent panel heard in-person submissions from five councils, 20 community groups, and 100 members of the public. A range of public forums have been held since the 2007, including community information sessions at San Remo, Wonthaggi, Inverloch and Kilcunda, and information stands at festivals and local markets (King, 2008). Several briefings have been given to local groups, councils, water authorities, landowners and other interested parties. In addition, members of the community are invited to talk to the staff of the desalination water project information office, Wonthaggi and to submit feedback forms through the website or information office (Victorian Government, 2009). Conclusion This report discussed the critical infrastructure process as it applies to Wonthaggi desalination plant. The plant desalination plant has been deemed critical infrastructure under section 75C of the Environmental Planning and Assessment Act 1979 (EP&A Act) by Victorian government who considered the project to be “essential for the state, environmental, economic or social reasons”. The wonthaggi desalination plant was considered ‘critical’ in securing Victoria’s water crisis. Despite the federal government’s intentions, the whole project received overwhelming public opposition. Over 1000 submission have been received in reponse to the public exhibition of the EA objected to the project, only 3 per cent supported it and 6 per cent did not clearly state a position. Analysis in this report suggests that in order for the federal government to gain greater stakeholder and community acceptance of the projects its needs to improve the transparency of the EA process and amend some key legislation. . 11.0 References Davidson, Kenneth (25 June 2013). "Water policy delivers scary possibilities". The Age (Melbourne). Ker, Peter (12 December 2009). "True cost of desal plant concealed". The Age (Australia). King, T. (2008). Domestic Water-saving Techniques and the Wonthaggi Desalination Plant: A survey of Local Residents’ Attitudes. Postal survey, Deakin University, October 2008. Randolph, B. and Troy, P. (2008) ‘Attitudes to conservation and water consumption’, Environmental Science & Policy, vol. 11, no. 5, pp.441-455. Rayan, M.A., B. Djebedjian and I. Khaled (2001) Water supply and demand and a desalination option for Sinai, Egypt. Desalination136, 73-81. Ross, Norrie (13 June 2008). "Opponents of Victorian desalination plant must pay costs". Herald Sun (www.news.com.au). Retrieved 19 July 2008. Victorian Government (2009) Desalination Plant, viewed 24 July 2009, http://www.ourwater.vic.gov.au/programs/desalination. Read More